This translation is very different from the one i've read in my language.
In the official translation i have read the swordmith was banished cause he was tasked to make a sword able to slay a dragon. And he did. But it was a useless sword that was too heavy for a human to lift. The king assumed this was a prank and got angry. This is way before the "fantasy world" the only supernatural beings are the apostles, there is no way someone can have used that sword to kill a dragon.